EXHIBIT 10.7
STRICTLY CONFIDENTIAL
SALES AGREEMENT NO: MB0000000000
SELLER - ALBEMARLE CORPORATION, a Virginia corporation (hereinafter called
"Albemarle") having a place of business at 000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxxxxxx 00000.
BUYER - TETRA TECHNOLOGIES, INC., a Delaware corporation (hereinafter called
"Buyer") having a place of business at 00000 X-00 Xxxxx, Xxx Xxxxxxxxx, Xxxxx
00000.
Albemarle agrees to sell and Buyer agrees to purchase the product specified
below upon the following terms and conditions:
1. PRODUCT- ELEMENTAL BROMINE
Product will conform to the specifications as attached (Exhibit A).
Buyer represents that Product purchased hereunder is primarily intended for
Buyer's use and consumption in the United States of America. Buyer recognizes
the nature of Product and the inherent issues associated with the handling and
use of the Product. Therefore, if Buyer sells Product or offers Product for
sale, Buyer will be responsible for product stewardship and safety issues that
are under Buyer's control associated with the shipment, handling and use of the
Product to or at Buyer's customers. Albemarle will have the right, but not the
obligation, to suspend, effective immediately upon notice, any shipments of
Product where Albemarle has reason to believe that minimal standards
commensurate with Albemarle's Product Stewardship Requirements (attached as
Exhibit B) are not being met or exceeded in Buyer's use, sale or resale of
Product.
2. QUANTITY AND MODE OF DELIVERY - During calendar year ****, Buyer will
purchase from Albemarle not less than ********* pounds of Product ("Minimum
Annual Purchase Quantity"). During calendar year 1999, Albemarle will make
available for purchase by Buyer ********* pounds of Product per month
("********* of the Minimum Annual Purchase Quantity"). Not less than ********
months prior to the beginning of each calendar year after **** (commencing with
calendar year ****), Buyer will notify Albemarle in writing of the "Minimum
Annual Purchase Quantity" for the upcoming calendar year. The Minimum Annual
Purchase Quantity for any calendar year will not exceed ********* pounds of
Product without Albemarle's prior written consent. Albemarle will indicate
whether or not it will agree to a "Minimum Annual Purchase Quantity" in excess
of ********* pounds of Product within **days of Buyer notification. No such
confirmation is required if Buyer's Minimum Annual Purchase Quantity
notification for the upcoming contract year is equal to, or less than, *********
pounds.
********* Confidential Treatment Requested
For each month listed below (Forecasted Month), Buyer will provide to Albemarle,
not later than the date listed below (Notification Date), a forecast of Buyer's
requirements for Product from Albemarle during the Forecasted Month. Albemarle
will make available to Buyer in the Forecasted Month a quantity of Product
("Albemarle Forecasted Month Supply Obligation") equal to the lesser of:
(a) ********* the applicable Forecasted Quantity; or
(b) ********* the Minimum Annual Purchase Quantity.
If Buyer desires to purchase from Albemarle a quantity of Product in excess of
the Albemarle Forecasted Month Supply Obligation during the Forecasted Month for
which the forecast has been given, Buyer will so notify Albemarle, and Albemarle
will have ten (10) days from receipt of Buyer's request to either agree to
supply (in whole or in part) or decline to supply Buyer's requirements for
Product during such month which are in excess of the Albemarle Forecasted Month
Supply Obligation. If Buyer's forecast is in the form of a purchase order or
other release document, none of the terms and conditions of the purchase order
or release document will be applicable to the extent that they replace or
supplement the terms and conditions hereof.
NOTIFICATION DATE FORECASTED MONTHS
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December 1 [1998 only] January & February [1999 only]
January 1 March
February 1 April
March 1 May
April 1 June
May 1 July
June 1 August
July 1 September
August 1 October
September 1 November
October 1 December
November 1 January
December 1 February
THIS IS A TAKE-OR-PAY CONTRACT. If during any calendar year, Buyer purchases
from Albemarle less than the Minimum Annual Purchase Quantity, then within
thirty (30) days after the end of such calendar year, Buyer will pay to
Albemarle a sum equal to the (i) price equal to ********, FOB Magnolia, AR,
freight collect (**** pricing) TIMES (ii) the difference between the aggregate
quantity of Product actually purchased by Buyer during such calendar year and
the Minimum Annual Purchase Quantity. For example, if, during 1999, Buyer
purchases ********* pounds of Product from Albemarle, then by January 31
following the end of the calendar year in question, Buyer will pay to Albemarle
******** times ********* (e.g., ********************) which equals ********. The
take-or-pay obligation specified above will apply notwithstanding that Albemarle
might in any month or months decline to make available to Buyer quantities of
Product in excess of
********* Confidential Treatment Requested
the Albemarle Forecasted Month Supply Obligation for such month. This
take-or-pay obligation will not apply to the extent that Buyer's failure to
purchase has been directly caused by events contemplated by Section B
(Contingencies) of the General Terms and Conditions (attached) which prevent
Buyer from purchasing the Minimum Annual Purchase Quantity. However, lack or
failure of markets for Product or products produced by Buyer therefrom will not
be considered a contingency which would excuse Buyer from purchases hereunder.
Without affecting the obligations set forth in the preceding sentences, in the
event that Buyer purchased from Albemarle during a calendar year less than the
Minimum Annual Purchase Quantity for that calendar year and in such calendar
year Buyer purchased from Albemarle at least ******************** of the total
amount of elemental bromine purchased by Buyer from third parties for sale or
use in North America, then, during the period from ************************* of
the following calendar year, Albemarle will make available to Buyer (FOB
Magnolia) ******************** of the volume of Product that Buyer failed to
take but paid for due to the take or pay obligation set forth in the preceding
paragraph. For purposes of calculating the total amount of elemental bromine
purchased by Buyer from third parties for sale or use in North America,
elemental bromine produced in Ludington, Michigan by the Dow/Tetra joint
venture, as well as elemental bromine obtained by swap or barter in exchange for
elemental bromine produced in Ludington, Michigan by the Dow/Tetra joint
venture, shall not be considered to have been purchased from a third party.
Albemarle will have the right to make available to Buyer the volume of Product
specified in the immediately preceding paragraph over such
********************** ************************* on an approximately equal
monthly basis. Albemarle will have the right to have an audit conducted by an
independent third party certified public accountant reasonably acceptable to
both Buyer and Albemarle to determine whether Buyer in fact purchased from
Albemarle during the calendar year in question at least ******************** of
the total amount of elemental bromine purchased by Buyer from third parties for
sale or use in North America. Albemarle will pay for such audit unless the
independent third party accountant determines that Buyer purchased from
Albemarle less than *** of Buyer's total annual requirements for elemental
bromine as defined above during the calendar year in question, in which case the
fees and expenses of the independent third party accountant will be paid by
Buyer. The audit shall be conducted confidentially and the only information
disclosed to Albemarle shall be whether the percent of elemental bromine
purchased from Albemarle was at least *** as defined above. In the event the
audit demonstrates that Buyer failed to purchase from Albemarle a minimum of ***
of Buyer's total annual requirements for elemental bromine during the calendar
year in question, then as to any volume of Product which Albemarle made
available to Buyer without further charge during the ************* period based
upon Buyer's notification, Buyer will pay to Albemarle the price which was
applicable to such Product during the calendar year in question.
A Certificate of Analysis will accompany each shipment.
********* Confidential Treatment Requested
3. PRICE AND DELIVERY TERMS - Pricing based on tiered prices as listed below.
Reduced price goes into effect for incremental volume. Prices are valid January
1, 1999 through December 31, ****.
ALBEMARLE OWNED TANK TRUCKS:
0 - ********* pounds *********, FOB Magnolia, AR, freight collect
********* + pounds *********, FOB Magnolia, AR, freight collect
BUYER SUPPLIED TRANSPORTATION EQUIPMENT (17 METRIC TON ISOTANK OR, UPON
DEMONSTRATION OF PROPER DOT EXEMPTIONS, 23 METRIC TON ISOTANKS) :
0 - ******** pounds ********, FOB Magnolia, AR, freight collect
********* + pounds ********, FOB Magnolia, AR, freight collect
Albemarle has the right, but not the obligation, to inspect and approve
any transportation and shipping containers or equipment supplied by Buyer.
Buyer is allowed to purchase a maximum of *** of total volume purchased
during the calendar year of Product in Albemarle owned tank trucks at the
"Buyer supplied transportation equipment" prices, to be given as a
********* rebate to be paid no later than 30 days after the end of the
calendar year.
The shipment that causes the total annual volume to be ********* pounds (whether
delivered in either Albemarle owned tank trucks or Buyer supplied transportation
equipment) will be priced at the *********************** price as listed above
for the entire shipment quantity.
For example, if Buyer purchases ********** pounds within the given calendar year
with the first ********* pounds purchased in Albemarle supplied tank trucks and
the remaining ********* pounds in Buyer supplied transportation equipment the
pricing would be as follows:
- ********* pounds will be priced at *********
- The next ********* pounds will be priced at ********
- The last ********* pounds will be priced at ********
- *** of total purchases is ********* pounds will be issued a *********
rebate.
Albemarle and Buyer agree to cooperate in the scheduling, loading and shipping
of Product in order to minimize unnecessary costs and delays to both Albemarle
and Buyer.
********* Confidential Treatment Requested
4. PRICE REVISION - Albemarle may at any time or times by written notice reduce
prices on products shipped hereunder after the effective date specified in such
notice.
Albemarle may raise prices or change delivery terms, or both, effective any
January 1 (beginning January 1, **** and each January 1 thereafter) upon written
notice to Buyer prior to September 1 and thereupon such revised prices or
revised delivery terms, or both, shall be applicable to all Products shipped
hereunder after the effective date. The maximum price increase for a particular
calendar year is *** above the price which was in effect during the immediately
preceding calendar year.
5. TERMS OF PAYMENT - Net 30 days from date of invoice.
6. TERM AND TERMINATION OF AGREEMENT - The term of this Agreement shall commence
on January 1, **** and terminate on December 31, **** provided, that said term
shall be automatically renewed from year to year, with such modifications, if
any, as the parties may agree upon, unless either party hereto shall, by
********* prior to the termination of the original term or any subsequent yearly
term, given written notice to the other party of its intention to terminate the
same at the end of such term subject, however, to the aforesaid rights of
revision and the following right of cancellation:
In case either party shall breach this Agreement by failing to comply with
any of the terms and conditions hereof, then the other party shall give notice
in writing specifying the breach complained of, and if the same be not remedied
within thirty (30) days from the time such notice is given this Agreement may be
canceled by the non-offending party.
7. CONFIDENTIALITY AND CONDITIONS -Both Buyer and Albemarle agree that the
terms and conditions hereof are confidential as between the parties and neither
Buyer nor Albemarle will permit or allow such terms and conditions hereof to
become known to any third party, including, without limitation, industry
publications or other media. In the event of breach of this obligation of
confidentiality by Buyer, Albemarle will have the right to terminate this
Agreement upon written notice to Buyer. Notwithstanding the first sentence in
Section 7, in the event that the Securities and Exchange Commission should
require that this Agreement be disclosed, the attached (Exhibit C) will be used
as the initial submission to the SEC. If any further information concerning this
Agreement is required by the SEC, Buyer will submit a copy of the SEC request to
Albemarle. Albemarle will have the option to participate in discussions
concerning any additional information requested by the SEC with the SEC. Any
additional information added to Exhibit C is limited to information required by
the SEC.
The conditions set forth on the attached page hereof are specifically made a
part of this Agreement.
********* Confidential Treatment Requested
8. Unless Buyer accepts Albemarle's offer, as contained in this Agreement, on or
before December 4, 1998, said offer shall expire and have no further effect
unless reinstated in writing by Albemarle.
TETRA TECHNOLOGIES, INC. ALBEMARLE CORPORATION
/s/ XXXXXX X. XXXXXXXXX /s/ N. XXXXX XXXXXXX
Xxxxxx X. Xxxxxxxxx N. Xxxxx Xxxxxxx
Business Manager, Bromine &
Flame Retardants Business Area Sales Manager, Bromine
Date: DECEMBER 7, 1998 Date: 12/3/98
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********* Confidential Treatment Requested
